An International Atomic Energy Agency report says its inspectors have uncovered highly sensitive nuclear technology in Iran that was not included in the declaration Iran made last year. The declaration was supposed to reveal all of Iran's nuclear capabilities.

The IAEA report given to diplomats on Tuesday concludes that Iran failed to declare sophisticated designs and components that could be used to enrich uranium quickly, a process that can be used to build a nuclear bomb.

Iran says it did not declare all of its nuclear capabilities because it was working against a deadline imposed by the international community and ran out of time. In its report, the IAEA says it finds this explanation difficult to comprehend and says the issue of the undeclared capability must be resolved.

Since Iran issued its report and agreed to more IAEA inspections, scientists from the agency have been working in Iran to determine the full extent of its nuclear program.

Iran insists its nuclear program is for peaceful purposes only. But Gary Samore of the International Institute for Strategic Studies says this is unconvincing.

"I don't know anybody who believes that Iran's program was intended for purely peaceful purposes," he said. "It's clear that their program, if you look at the history of their program, it's clear it was intended primarily for the development of a nuclear weapons option. Based on the information we have now, they were at least a couple of years away from being able to build and operate a production scale centrifuge facility which would allow them to produce enough weapons grade uranium for a couple of nuclear weapons a year."

The IAEA report says the basic equipment and technology used by Tehran shows striking similarities to material found in Libya, where the agency has also conducted verification work.

"Based on what we know about A.Q. Khan's activities, I think its very plausible he offered to sell nuclear weapons designs to Iran just as he offered and sold nuclear weapons designs to Libya for $50 million," he said. "Whether the Iranian government purchased those designs is something we don't know at this point."

That is the key question that the IAEA's 35 member board will discuss when it meets in Vienna at the beginning of March.